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Refugees and IDPs As a result of the continuing conflict in Syria and ongoing conflicts elsewhere, the number of refugees and IDPs reached an unprecedented 65.3 million people in 2015, with an estimated economic impact of $175 billion PPP. This is more than a sixfold increase since 2007. IEP’s model accounts for lost production, consumption and investment in the country of origin for displaced persons or refugees. It also includes spending by UNHCR. However, the model does not account for cost of refugees to the international community and destination countries. For instance, since the start of the Syrian crisis Turkey has spent US$ 7 billion and the European commission has pledged €3 billion for 2016 and 2017 to help Turkey in responding to the refugee inflows from Syria and Iraq which are not counted in the model. 24 Therefore, the actual total cost of the refugee crisis is likely to be much higher. Figure 23 shows the global trend in the direct economic costs for the UNHCR agency alone which has dealt with a significant majority of the direct humanitarian assistance for refugees and IDPs. Its direct costs have gone through a nearly three-fold increase since 2008, from less than US$1.25 billion to almost US$3.5 billion in 2014 and 2015. The vast majority of the world’s displaced people originate from the Middle East, Africa and South Asia. Syria, Afghanistan and Somalia account for 54 per cent of all refugees and displaced people in the world. 25 Moreover, the largest burden of population displacement falls on neighbouring countries, which host the largest proportion of refugees. For instance, Turkey, Lebanon and Pakistan are hosting 2.5, 1.1 and 1.6 million Syrian, Iraqi and Afghan refugees respectively. 26 FIGURE 23 TREND IN UNHCR BUDGET 2007 - 2015 The refugee crisis has led to a large increase in the direct costs of assisting refugees and displaced people. 4000 CONSTANT 2014 US$, MILLIONS 3500 3000 2500 2000 1500 1000 500 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: UNHCR “ Syria, Afghanistan and Somalia account for 54 per cent of all refugees and displaced people in the world. THE ECONOMIC VALUE OF PEACE 2016 | Results & Trends 30

Terrorism The economic impact of terrorism was $113 billion PPP in 2015 and has increased 60 per cent since 2007. The cost of terrorism includes the cost of deaths and injuries due to terrorism incidents. IEP’s model excludes property destruction and the larger macroeconomic impacts of terrorism. Therefore, the estimates of terrorism as calculated by this report are likely to be conservative. Figure 24 shows the trend in the economic impact of terrorism mirroring broader trends in terrorist activity and violence captured in IEP’s Global Terrorism Index report. MENA is the worst affected region followed by sub- Saharan Africa and South Asia. Iraq, Nigeria, Pakistan and Afghanistan are the four worst affected countries with Syria, Egypt, Libya and Saudi Arabia also among the ten most affected countries. However, the greatest year on year increase in the economic impact of terrorism occurred in Europe, with the total cost increasing over 1,600 per cent in a single year. North America also experienced a significant increase in the economic impact of terrorism from 2014 to 2015, as costs rose by over 100 per cent. Outside of the direct cost of terrorism in terms of property damage and lives lost, the transnational nature of terrorist activity today and the ability of terrorist groups to undertake attacks beyond their areas of influence poses additional costs to the international community. For instance, the Pentagon estimates the daily average cost of US involvement in the war against ISIL is US$11.7 million per day. 27 FIGURE 24 TREND IN THE ECONOMIC IMPACT OF TERRORISM, 2007 - 2014 The total economic impact of terrorism has increased by 60 per cent since 2007. 140 CONSTANT 2014 PPP$, BILLIONS 120 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 Source: IEP “ MENA is the worst affected region followed by sub-Saharan Africa and South Asia. Iraq, Nigeria, Pakistan and Afghanistan are the four worst affected countries with Syria, Egypt, Libya and Saudi Arabia also among the ten most affected countries. THE ECONOMIC VALUE OF PEACE 2016 | Results & Trends 31

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